THE DIGITAL MARKETING COMPANY

WHITE PAPER | APRIL 2008

How The Casino Next Door Is Getting Ready To Kick Your A**
Why it’s Time to Get Real about Mobile in Casino Marketing
Co-Authored by mobileStorm Inc. and Pollux & Castor

Published by mobileStorm Inc. 6565 Sunset Blvd. Ste 200 Los Angeles, CA 90028 Telephone (323) 785-6333 Facsimile (323) 957-0308 Copyright © 2009
No part of the contents of this publication may be reproduced or transmitted in any form or by any means without the written permission of the mobileStorm Inc. mobileStorm is a registered trademark of mobileStorm Inc. All other trademarks are the property of their respective owners. www.mobilestorm.com

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

Table of Contents
Introduction ................................................................................................... Page 1 Why Mobile? Reasons to choose mobile ...................................................................... Page 3 So What? A look at benchmark casinos ................................................................... Page 4 The Race to Be the Best at SMS: Mobile Marketing Gets Real Programs in place in casinos today ........................................................... Page 5 About mobileStorm SMS What you need to know about mobileStorm SMS ........................................ Page 6

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

Introduction
You probably heard the news. It wasn’t so long ago that the Las Vegas Sun published a report on the state of the tourism business in Nevada. With budget cuts running rampant, the State has cut most of its advertising loose, releasing DRGM as its agency of record and cutting TV campaigns in favor of digital alternatives.[1] The Nevada Tourism Board’s recommendation for casinos and resorts was direct: “Do more with less.” In other words, “You’re on your own.” We didn’t really need to hear that, but at least some good suggestions were also included, such as the use of mobile marketing. Here are the sobering facts about the state of gaming today: • Fitch Ratings, the international credit ratings agency, reports that revenue from commercial casinos declined 2.5 percent in 2008, without recovery expected until 2010.[2] • “Gaming spend-per-visit has been affected more than visitation levels,” the Fitch report says.[3] • MGM Mirage and Harrah’s Entertainment laid off 3,000 employees in 2008.

Nevada Gaming Control Board reports profit for Nevada casinos fell 69% for the fiscal year ending June 2008.

• The Mississippi Gaming Commission says Gulf Coast gaming revenues were down by over $400 million between 2007 and 2008.[4] • Atlantic City casinos generated $4.55 billion in revenue, down some 7.6 percent from 2007 and 2006.[5] Revenues are down by billions of dollars. Profits are off by 60 percent to 70 percent, and there are even losses at properties that have generated cash for years.

1

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real about Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

Casinos and the gaming industry were getting hit hard even before someone declared the current recession a fact–and the blows may have just begun. Casino marketers have always worked hard to make sure every aspect of their marketing plans earned a high return on investment (ROI). Now, static models that have been perfected over the years are threatened. One of the answers to this problem may lie in new ways to acquire customers and develop the customer base more efficiently. There are some casinos that have had the foresight—and perhaps the luck—to see a downturn coming. They have already learned to accelerate their use of digital marketing, including SMS/text campaigns, which are particularly easy to deploy. These forward thinkers include the MGM Grand, Mandalay Bay, Luxor, Hard Rock Hotel & Casino, Barona Valley Ranch, and Palms Casino Resort. “It’s not that people aren’t coming; it’s that they are not playing as much,” says Jack Breslin, senior vice president of marketing for GA Wright Casino Marketing. “Casinos are keeping a close eye on ROI, and as such they are focusing on direct marketing programs because (they are) measurable. They are really scrutinizing their programs closely and offering things like deals on food and special packages to keep people coming in to play in the casino, especially the top players who drive most of their revenue.”[6] The reason they have emphasized digital messaging is simple: a high rate of return and affordability. For gaming operators, the objectives are clear: Entice new visitors, drive repeat patronage from local clientele, and maximize spending on the property. As the Las Vegas Review-Journal says: “Text sells.”[7] When a marketer sends SMS messages to consumers who have initialized the relationship with the brand by subscribing to receive its texts, they get results. Did you know: • 95 percent of text messages are read within the first 15 minutes. • There are virtually no delivery issues with SMS. Those who think SMS is a new, unproven medium for their industry should think again, and fast. Most of their major competitors are already a step ahead. This is a channel that can communicate back to someone immediately, wherever he or she is. Having someone’s cell phone number is like having the person’s social security number—it’s forever. An average of 33 percent of email addresses change on a yearly basis, but because of number portability, one can go from AT&T to Verizon and keep the same number–and most people do.

Check out what the Rio, a Harrah’s Entertainment property, is sending right now.

2

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

Why Mobile?
Three reasons why mobile works:

Effective

Enticing

Economical

While casino marketing executives may sugar-coat their purpose, the fact is that marketing is about control. The reason why digital marketing channels are becoming so popular is because they offer the ability to accurately “measure” the control sought. A marketer’s job is to predict human action and interaction, and now that job has become less vague. New digital methods can clearly prove or disprove customer engagement. In other words, marketers really have the ability to track campaigns and return on marketing spending with digital promotions. Let’s jump directly to immediate action. The reason for getting right to the subject of results is due to the nature of text messaging, one of the most astonishing marketing technologies ever in terms of initiating a direct action from the message recipient. Why is a text message so effective? It gets to the point and it directly reaches one’s audience. Consider that nearly 100 percent of phones are now SMS enabled. Nearly 100 percent of the customers on a casino property have a cell phone within reach right now. Cell phones are an extension of everyone, and a text message is an unabated avenue to reach them. People are choosing to communicate increasingly more via SMS, because its short format is convenient. Meanwhile the most effective marketing messages are known to be those that require the least amount of thought from the consumer. To repeat: • The most effective marketing–simple, direct, concise. • Astonishing increase in the use of SMS messaging as the medium of choice by Americans. So SMS just makes sense. However, achieving measureable, concrete ROI during the economic downturn is also crucial for casino executives—and again, SMS is the perfect choice. We can measure, for instance, that in the casino business, responses to SMS usage for guests who are physically on properties throughout the United States are more than promising–with average redemption rates of slightly more than 30 percent for targeted offers. The immediacy of SMS technology is unprecedented in marketing and communication. Imagine that someone sees “text the word DEAL to 38714” on a video screen or poster at a casino. The person takes out his or her phone, and texts in to receive offers during his or her stay. The casino can then send more offers right away and drive the consumer to everything from gaming to entertainment. No other communication channel has this capability.

3

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

So What?
A marketing executive may look at the company’s last P&L statement and think, “We’re safe.” A company may still have that marginal lead when it comes to proving the value of its marketing strategy. But how long can a brand pull the business through a downturn? In an unpredictable economy, what’s becoming clearer to all businesses—including casinos—is that nothing is for certain, even day-to-day. Casino marketers know that right now is the best time to make money. For a low-risk, high-ROI promotion, SMS messaging is the poster child. Successful casinos are all about above-par marketing. Take a look at some benchmarks. MGM Grand VP of Advertising Michael Perhaes says, “We are better able to serve customers thanks to targeted messaging. We inform hotel guests only about amenities in which they are interested, without bothering them with messages that were not relevant.” The database value continues to grow. MGM Grand uses ongoing marketing programs to keep these customers coming back, such as Mobile Concierge services and VIP programs for nightclubs.[8] New York New York Hotel & Casino now offers incentives on its website soliciting cell numbers to receive promotional offers. It also has a mobile web site (mobile.nynyhotelcasino.com). The company states, “Now you can use a mobile device to access all of the information about dining, entertainment, gaming, accommodations, and other guest services at New York New York Hotel & Casino anywhere, anytime. You can also check hotel room rates, promotions, and make room reservations on the mobile site.”[9] Barona Valley Ranch has launched a pilot test of its innovative mobile marketing campaign, which utilizes 2-D barcode text messages that can be scanned to provide special offers and information to its players. Barona is testing the technology to gauge delivery, as well as participants’ acceptance and response of 2-D barcode text message-based offers. Players were selected for the test based on their top tier level in Club Barona (Diamond Card holders) and through exclusive invitations from their executive hosts. “As one of the first organizations in the country to utilize this technology, our goal is to create a mobile marketing program that will provide convenient services to our players with added benefits,” says Troy Simpson, Barona’s Senior Vice President of Innovation.[10] Harrahs Entertainment uses real time mobile marketing promotions: “Text the word RIO to (short code posted throughout the property).” Customers receive up to a dozen text messages throughout the average stay of four days, with special deals for food, beverages, shows, etc. Mike Weaver, VP Marketing, says redemption rates are an average of three coupons per visit. That’s a 25 percent redemption rate! [11] Palms Casino Resort Director of Relationship Marketing Grant Jorgenson tells mobileStorm: “In today’s world, people are always on the go and text messaging has enabled us to target our customers whenever and wherever they may be. It allows us to reach out to them at any given moment. Our customers are notified when concert tickets go on sale, when we have any special guests, and when we are offering deals for food and beverages or hotel rooms. They also receive reminders a day before to pick up their free gift for our many gift-day promotions. Text messaging has made it possible for us to keep our customers in the now and interconnected with the Palms and all we have to offer.” Take inventory. Where is your property in the evolution of true one-to-one relationships with loyal customers? If your players aren’t receiving valuable SMS text offers while on your property, they may be receiving them from your competition—while on your property—and could at your rival’s buffet tonight. Who’s the shark and who’s the guppy?

4

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

The Race to Be the Best at SMS: Mobile Marketing Gets Real
The race has begun in the gaming industry to implement text messaging that is compelling for casino clientele. The technology is in place today to promote via SMS and make money. Don’t get left behind. Strategies to capture cell phone numbers are being used in nearly every marketing opportunity: Texting to short codes or vanity codes, capture at sign-up for the players club, online, text-to-win promotions, etc. It’s only a matter of time until SMS messaging replaces traditional casino marketing tactics like direct mail, with its quick and easy redemption profile. For both passers-by and loyal customers, this is a tool to reduce the cost of reaching such guests. Reach them, and boost play rates and keep rooms and restaurants full. Here are a few programs in place today:

Visitors to an on-property event or restaurant are text-messaged with offers to stay and play more. Additional spontaneous cash prizes are built into promotions. Offers to “earn 100 more points before midnight to be eligible for additional prizes” adds additional excitement. Automatic message triggered when a jackpot gets over a certain amount, driving traffic into the casino to try to win. Cherry pies, sunglasses, hats, and T-shirts are given to loyal players weekly. Instead of spending 42 cents to send a piece of mail, send out an SMS blast to these customers for half the cost and an increased response rate. Text message coupons or offers are redeemed by showing an onscreen coupon to the clerk, who is able to enter the coupon directly into the POS system. Players’ club members are targeted based on total play. As a customer nears the next players’ club level, a message is sent telling them they only need, for example, 200 more points to move to that level. This can happen as they are sitting and playing or anytime within the player cultivation cycle. A room block falls out. Room offers are sent immediately to fill the block. A tournament needs 10 more players. A message goes out with a special incentive for the last 10 people to sign up. A restaurant grand opening is weak. Text messages are sent to everyone within 10 miles of the property inviting them to dine. Full integration into the player tracking system prompting immediate “bounce back” offers, “thank you” messaging, and more. Billboards on main thoroughfares leading into casino locale tout Mobile VIP club [such as “text PLAYER to 38714”]. Included are pertinent short code and keyword for passers-by to text in to join the club for special offers and updates. Non-players’ club members who are more than one hour away from the property are sent a special weekend rate, good if they join the players’ club within the following seven days.

5

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

About mobileStorm SMS
How do you get into this business without a big investment? How can you tell what will work for you and what kind of returns to expect? You need an expert in marketing casino and gaming services via SMS/text. You need to learn about mobileStorm. As text messaging has grown into a mainstream communication tool for consumers, reaching them via SMS marketing has become an increasingly important strategy for the casino industry. More targets are using SMS every day—and a new generation of targets was raised on using SMS as a primary communication method. Savvy marketers realize text messaging is not just critical to survive in the future; it’s a great way to promote and earn right now. mobileStorm SMS is a solution that allows clients to take advantage of text message marketing by: • Generating relationships and leveraging this new way of communicating with guests and targets, without having to pay a high monthly fee. • Letting clients engage in a two-way interaction with subscribers, such as asking them questions or prompting a call-to-action within the message. mobileStorm can help you craft a pilot program that is uniquely tailored to your property’s needs and which will allow you to test how SMS can give you the best results. With low start-up costs, short ramp-up times, and no long-term commitments, we are here to set up benchmarks to measure your success. For more information about mobileStorm SMS, or for a free demo, contact the mobileStorm sales team. 866-492-7886 or 323-785-6333 sales@mobilestorm.com Schedule a demo: https://www.mobilestorm.com/stun/corporate-client-demo/

6

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

Citations
1

Richard N. Velotta, “Budget cuts play havoc with Nevada’s efforts on tourism marketing efforts,” Las Vegas Sun, February 6, 2009 U.S. Gaming Industry Recovery Unlikely Until 2010 (Fitch Ratings, December 16, 2008) IBID Howard Stutz, “Casino profits plunge,” Las Vegas Review-Journal, January 17, 2009 Lisa Plummer, Stephanie Corbin, Gary Tufel, and Michael Hart, “Casino Capitals: Betting on a Future,” Tradeshow Week, February 9, 2009 Dianna Dilworth, “Casinos look for ROI in downturn,” DMNews, February 13, 2009 Arnold M. Knightly, “TEXT SELLS: Rio rolls out mobile marketing campaign,” Las Vegas Review-Journal, February 14, 2009 MGM Grand Use Scenario (mobileStorm Inc., February 2008) New York New York Hotel & Casino, “Wireless,” http://www.nynyhotelcasino.com/hotel/hotel_wireless.aspx (accessed April 16, 2009) “Barona testing mobile marketing campaign,” Casino Journal, January 27, 2009 Arnold M. Knightly, “TEXT SELLS: Rio rolls out mobile marketing campaign,” Las Vegas Review-Journal, February 14, 2009

2

3

4

5

6

7

8

9

10

11

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

About mobileStorm Inc.
For nearly a decade, mobileStorm has pioneered the concept of digital marketing. Having successfully delivered more than two billion messages on behalf of thousands of premier customers such as MGM Grand, Palms Casino, American Idol, Qantas Airways, Carl’s Jr., Squaw Valley Ski Resort, and Horoscope.com, mobileStorm is at the forefront of the digital marketing revolution. The company provides a turnkey, hosted email and digital messaging platform backed by world-class support and expert digital marketing services. mobileStorm has created the most complete digital marketing solution available, enabling clients to reach customers via SMS messaging, email marketing, voice messaging, RSS marketing, video broadcast, or fax broadcast from a single provider. mobileStorm is a do-it-yourself database messaging system that enables companies to fully leverage their list of customers, prospects and partners by contacting them in the ways they wish to be reached. With mobileStorm, companies can utilize their entire database regardless of contact type—cell phone, email, telephone, fax or mailing address—through a single system, whether sending a broadcast message to all subscribers or a highly targeted message to a select few important contacts.

7

How The Casino Next Door Is Getting Ready To Kick Your A**: Why It’s Time to Get Real About Mobile in Casino Marketing Copyright © 2009 mobileStorm Inc. All rights reserved.

Sign up to vote on this title
UsefulNot useful